Court approves state request for receivership of Amistad America

A state-appointed receiver took control Thursday over Amistad America Inc., owner of the replica 19th century La Amistad schooner built at Mystic Seaport that has been widely used to tell the story of a slave rebellion and an early victory for civil rights.

The state’s takeover of Amistad America, initiated by Attorney General George Jepsen and agreed to by Amistad America’s board of trustees, came about two weeks after audits of the organization were released showing that it had defaulted on hundreds of thousands of dollars in debts, lacked sufficient cash flow and exhibited weak recordkeeping.

“The existing directors and officers have demonstrated an inability to properly manage the affairs of the Amistad America,” Jepsen said in a court filing that also indicated there was apparently no sign of “intentional malfeasance” or misappropriation of funds.

New Haven attorney Katharine B. Sacks was named in Hartford Superior Court as the state’s receiver, charged with bringing Amistad America’s finances in order until a new governing structure can be implemented.

Asked whether she would be working with Amistad America directly as the financial responsibility for the ship is transitioned to her, Sacks didn’t hesitate in a brief phone interview.

“Absolutely,” she said. “They know more about the ship than anybody.”

Amistad America, formed in 1998 and based in Hamden, lost its nonprofit status two years ago for failing to file tax returns. Nevertheless, the state continued to make annual $360,000 payments to the organization until finally freezing funding for the upcoming 2014-15 fiscal year as controversy over the organization’s lack of fiscal accountability intensified.

In all, the state has given the organization nearly $9 million over the years. The ship cost $2.5 million to build.

“This is an important and necessary step to assure the people of Connecticut that there is appropriate oversight of the Amistad and that this vessel is living up to its educational mission,” Gov. Dannel P. Malloy said in a statement.

The state takeover comes close to two weeks after 25 legislators, led by state Rep. Diana Urban, D-North Stonington, and state Rep. Ted Moukawsher, D-Groton, wrote a letter to Jepsen expressing their concerns.

“This is exactly what needed to happen,” Urban said in a phone interview after the receivership was announced. “We finally struck a chord.”

Urban said she believes the state takeover will give potential donors more assurance that their funds will be well spent. It also clears the air for the state of Connecticut, she said, whose reputation was being hurt by the Amistad controversy.

“People look at this and say if the state of Connecticut can’t manage the $8 million that went to that group, then how the heck are we managing a $40 billion budget?” Urban said in a phone interview.

Moukawsher said he was concerned about the “questionable practices” of Amistad America and was hoping the state takeover would clear the air.

“I’m very pleased to see that the attorney general has acted,” he said by phone.

Urban used the latest Amistad news to push a plan to require a “results-based accountability report card” to determine the ship’s value to the state.

“The report card is going to ask three data-based questions: How much did you do? How well did you do it? Is anyone better off?” she said in a statement.

“We’ve been working closely with the state through this entire rebuilding process and we trust they have the best intentions of our organization in mind,” said Washington.

Jepsen said in a statement that the receivership will continue “until the public can be assured that its money is being properly used and accounted for and that a plan exists for the organization to responsibly carry out its mission into the future.”

The 79-foot Amistad replica, homeported in New Haven, is scheduled to be in New London this weekend as part of the Custom House Maritime Museum and New London Maritime Society’s commemoration of the 175th anniversary of the Amistad’s first stop in New London.

The city’s Port Authority on Thursday said contact was made with an attorney assigned as the receiver for Amistad, and dock space would be available for the ship’s visit from today through Monday.

Amistad was in Niantic Bay Thursday evening and is expected to arrive in the city this morning. Susan Tamulevich, director of the Custom House Maritime Museum and New London Maritime Society, said the organization had raised $300 through donations for the docking fee. The docking fee during an event is $300 for three nights, according to port authority members.

The original ship became embroiled in controversy in 1839 when 53 Africans who had revolted against their captors were arrested and jailed by the U.S. government on murder charges. Their release, thanks in part to the intervention of former U.S. President John Quincy Adams in a case that made it all the way to the Supreme Court, was considered one of the first great victories for the nation’s anti-slavery movement and inspired the 1997 Steven Spielberg movie “Amistad,” partially filmed at Mystic Seaport.